Europe prepares for trade war with Trump. What is the EU bazooka and when could it be used?
The European Union is tightening its position towards Washington, and several capitals support the preparation of the EU bloc's toughest commercial instrument, in the event that American President Donald Trump does not renounce threats related to Greenland and the new tariffs announced, writes politico.eu.
Germany has joined France and will ask the European Commission to consider the possibility of activating the Anti-Coercion Instrument (ACI) at Thursday night's extraordinary summit of EU leaders in Brussels, according to five European diplomats familiar with the discussions. Berlin's move brings the Union closer to a much firmer response to Trump's increasingly aggressive rhetoric regarding Danish territory.
“The determination has been there for a few days. I felt it in the bilateral talks. There is very broad support for the idea that the EU needs to prepare for all scenarios, and that means all the tools are on the table”declared one of the diplomats.
The exact direction that governments will ask for from the European Commission will largely depend on the US president's speech at the World Economic Forum in Davos, scheduled for Wednesday. While some European leaders are trying to get meetings with Trump on the sidelines of the meeting to convince him to give up the tariffs, calculations are already being made in Brussels for the scenario in which the threats become reality.
On Saturday, Donald Trump announced the imposition of a 10% tariff on NATO allies who opposed the takeover of Greenland, including France, Germany, Denmark, the Netherlands, Great Britain, Norway, Sweden and Finland. Later, the White House leader escalated the conflict, threatening 200% tariffs on French wine and champagne.
In addition to the so-called “bazooka”, European leaders are also discussing the activation of an older package of retaliatory measures, which would involve tariffs on US exports worth 93 billion euros. Two EU diplomats indicated that these tariffs could be imposed quickly, while the Commission would go through the more complex procedure required to trigger the Anti-Coercion Tool.
“We have to stop being naive”
“There is a convergence with the Germans, an awakening from naivety. We must stop being naive”said a senior French official, referring to the possibility of using the “bazooka” against Washington. President Emmanuel Macron has long supported this option, although other capitals have been more cautious, fearing further retaliation from Trump and the economic costs to their own economies.
In Berlin, the calculation seems to be that to avoid a full-blown trade war with the United States, the EU must have a credible deterrent.
“We have a number of tools at our disposal, and we agree that we don't want to use them. But if we have to, we will use them.”German Chancellor Friedrich Merz said on Monday.
The Anti-Coercion Instrument is one of the EU's most powerful levers, allowing for a wide range of measures, from imposing tariffs and restricting exports of strategic goods to excluding US companies from public tenders. Precisely for this reason, such a decision would not be taken lightly, having a significant impact on the European economy.
The last time the EU considered using this tool against the US — after Trump imposed unilateral tariffs in 2025 — the bloc took a step back. This time, however, the European capitals seem to have a greater tolerance for costs, diplomats claim.
“It's a completely different situation than last summer, when it was just a trade dispute. Back then, the countries didn't want to argue over the difference between 10 and 15%. Now we're no longer in the area of > things, but in the area of > things,” one of them explained.
Triggering the ACI would require the support of at least 15 member states in the EU Council. Diplomats hope that Italian Prime Minister Giorgia Meloni, a declared ally of Trump, will join the effort. As the third economy of the Union, Italy's position would be an important signal of unity.
For now, Rome prefers the continuation of the de-escalation dialogue with Washington, and Poland's position remains unclear. However, amid the rapprochement between Paris and Berlin, the pressure on Rome and Warsaw to align will increase significantly.
A key element for changing Germany's attitude is the support of the business environment. Bertram Kawlath, president of the German car manufacturers' association (VDMA), called on Brussels to consider using the Anti-Coercion Instrument, even though the European mechanical industry is “already disproportionately affected by US tariffs”.
